One of the charities supported by John Studzinski, former co-head of corporate banking, investment banking and markets at HSBC, sponsors young playwrights. He must have taken a few pointers on dramatic exits, as his departure from the bank in May could hardly have been better timed. It was by far the bankâs most impressive quarter for mergers and acquisitions business since Studzinskiâs arrival.

Studzinski: timed perfectly

After nearly three years during which Studzinski promised much without delivering, the bank’s advisory business finally came good. HSBC was an adviser to the consortium led by Spanish construction company Ferrovial that acquired BAA, the UK airports operator, for £10.1bn (€14.6bn) last month.

Weeks later it secured victory in Mittal Steel’s long-running battle to take over Luxembourg’s Arcelor in a deal worth €42.6bn including debt. It meant HSBC was involved as an adviser in four of the five biggest European M&A deals of the year, having worked on E.On’s $56.7bn bid for Spain’s Endesa and the $43bn merger between France’s Suez and Gaz de France.

It finished the quarter with a flourish, as co-adviser to Phelps Dodge on the US mining company’s $56bn tie-up with Canada’s Inco and Falconbridge.

Studzinski’s exit may have hogged the limelight, but the real star of the show was Adrian Coates and his mining, metals and energy team, which was responsible for the Phelps Dodge, E.On and Mittal mandates.

It was HSBC’s willingness to use its balance sheet to back bids that played a vital role in winning advisory work. It will lend Phelps Dodge $11bn alongside co-adviser Citigroup, which is putting up the same amount. It is unlikely many other banks would have committed to such a loan at short notice and the deal reflected HSBC’s new appetite to support its investment banking business.

This month Coates told Financial News the bank was trying to seek out deals where it could use its balance sheet. “Our focus is on the bank being a big adviser and supporter of its clients,” he said.

While much has been made of the coterie of highly paid investment bankers assembled by Studzinski, it is more likely to be HSBC’s openness to using balance sheet muscle that will elevate it to the top of global M&A.

Of course, one quarter’s success does not make a winning investment banking franchise. How well the bank copes with the fallout from Studzinski’s departure will determine whether his three years in charge is seen as a turning point.

Some of the high-profile bankers brought in by Studzinski are likely to leave as their guaranteed compensation packages run out. But Stuart Gulliver, head of the division, is a highly rated manager who will work hard to keep the people he values.

Daniel Palmer, a former Morgan Stanley star hired by Studzinski to head equity capital markets, was promoted to head of global markets and will return to London from Hong Kong. This month the bank announced the appointment of Spencer Lake, who worked at Merrill Lynch for 17 years, as global head of debt capital markets, reporting to Palmer.

Studzinski will go to his new job at private equity group Blackstone considerably richer for his three years at HSBC – he and Gulliver shared more than £60m. The last quarter suggests that by following Citigroup’s lead and using its balance sheet to back its bankers, HSBC may finally have found the formula that will make its investment bank work.